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KLA Corporation
S&P 500 Nasdaq 100
$33.9B
Market Cap
29.5
P/E
1.73
PEG
38.5%
ROCE
100.8%
ROE
1.25
D/E
39.3%
OPM
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Currency-adjusted total returns for KLAC including FX impact
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Ratio Health
Excellent
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By Category
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About

KLA Corporation, together with its subsidiaries, designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide.

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⭐ Superinvestors Holding KLAC
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Manager Shares Value % of Fund Period
Daniel Loeb Third Point LLC 11.0K $16.2B 0.78% Mar 2026
Steve Cohen Point72 Asset Management 980 $1.4M 0.00% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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3-Statement Financial Model
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Good quarter Investor Presentation One-Pager? Q3 2026
Revenue
$3.415B
+11% YoY
Operating Income
$1.454B
+10% YoY
Operating Margin
42.6%
+0.9pp YoY
Net Income
$1.239B
+10.5% YoY
What Went Right
  • Revenue beat guidance midpoint of $3.35B, delivered $3.415B
  • Advanced packaging revenue expected to grow from $635M in 2025 to ~$1B in 2026, well above prior estimates
  • Service business grew 16% YoY to $775M, driving predictable cash flow
What to Watch
  • DRAM chip cost headwind continues, estimated 100bps negative impact on gross margin through calendar 2026
  • Operating expenses were higher than expected due to prototype materials timing and reserve adjustments
  • Tariff environment creates uncertainty; gross margin guidance unchanged at ~62% ±50bps for 2026
Management Guidance
  • Q4 June 2026 revenue guided to $3.575B ±$200M
  • Q4 non-GAAP diluted EPS guided to $9.87 ±$1.00
  • Full-year 2026 revenue expected to grow high-teens; Semiconductor Process Control systems revenue to grow over 20%
Investor Lens
The thesis is stronger after this call. KLA demonstrated robust execution with a beat-and-raise quarter, strong demand visibility into 2027, and market share gains in process control and advanced packaging. While DRAM cost and tariff headwinds persist, management's confidence in sustained outperformance and capacity expansion supports the long-term growth narrative. The raised free cash flow return target (over 90% of FCF) and explicit 2027 growth commentary reinforce the durable compounding story.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Solid beat driven by AI and advanced packaging momentum
Revenue
Revenue was $3.415B, up 4% sequentially and 11% year-over-year, above the guided midpoint of $3.35B. Growth was driven by leading-edge Foundry Logic and High-Bandwidth Memory investments, with advanced packaging revenue expected to double to ~$1B in 2026.
Profitability
Non-GAAP net income was $1.239B, up ~10.5% YoY, with non-GAAP diluted EPS of $9.40 (above the midpoint). GAAP net income was $1.201B and GAAP EPS $9.12. Operating income came in at $1.454B, reflecting strong operational leverage.
Margins
Gross margin was 62.2%, 45bps above guidance midpoint, benefiting from service business mix and manufacturing scale. Operating margin was 42.6%. Gross margin for 2026 is expected to remain around 62% ±50bps, with a persistent 100bps headwind from elevated DRAM chip costs.
Balance Sheet
Ended the quarter with $5B in cash and equivalents and $5.95B in debt. Free cash flow was $622M for the quarter and $4B over trailing twelve months (31% margin). Capital return totaled $875M in buybacks and dividends; $3.2B over 12 months.
Key Risks
Management flagged a persistent 100bps gross margin headwind from DRAM chip costs through at least calendar 2026. Tariff uncertainty remains a factor, though the impact is expected to lessen through the year. Supply chain tightness in the first half of 2026 constrained ability to scale, but capacity is being built for 2027 ramp.
Outlook
For June quarter, revenue guided to $3.575B ±$200M and non-GAAP EPS $9.87 ±$1.00. Full-year 2026 revenue expected to grow high teens, with Semiconductor Process Control systems revenue growing over 20%. Management sees 2027 WFE growth rate exceeding 2026, supported by strong backlog and customer urgency.
Generated by AI · Q3 2026 results · Not investment advice
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📊 Analysis Methodology

This comprehensive investment analysis was conducted using The Finmagine™ Stock Analysis & Ranking Methodology, a proprietary framework that systematically evaluates stocks across five critical dimensions: Financial Health, Growth Prospects, Competitive Positioning, Management Quality, and Valuation.

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

⚠️ Important Disclaimers — Please read without fail.

Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Finmagine is not registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC) or any state securities authority. Nothing on this platform constitutes investment advice as defined under the Investment Advisers Act of 1940.

Conflict of Interest Disclosure:
The author and/or analyst may currently hold or have previously held positions in the securities discussed. Any such positions are not intended to influence the objectivity or independence of the analysis. This research is produced independently and is not sponsored, endorsed, or commissioned by any company or institution.

Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

Forward-Looking Statements:
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